On 1 December The Swedish Corporate Governance Board announced proposed revisions to the Takeover Code. The revised rules are expected to come into effect on 1 January 2021.
The proposed rule changes are partly an adaptation to the updated prospectus regulations, primarily in the Appendix to the regulations, and partly an incorporation of the Swedish Securities Council’s generally accepted practice regarding various matters concerning takeovers. The changes include the following:
An offeror may not make its offer conditional on the offeree company’s future financing.
Conditions for reducing an acceptance period – the opinion of the offeree company’s board must first be sought; if an ongoing acceptance period is to be shortened, the offeror must have specifically reserved the right to do so.
Clearer rules on prior transactions – if a prior transaction is conducted in exchange for consideration in unlisted shares, a share consideration alternative must be offered in the event that the prior transaction is to be structured in another manner. Additionally, there is clarification that arrangements that give the offeror financial exposure equivalent to a shareholding in the offeree company are also covered by the prior transaction rules, and that such arrangements may in certain cases be contrary to good practice in the stock market if they can be considered a circumvention of the mandatory bid rules. An example of the latter may be a shareholder's increased exposure via capital redemption insurance, which means that the underlying shares are passivized. This has the consequence that the shareholder's own holdings exceed the mandatory bid limit if the passivised shares are disregarded.
Remuneration to board members of offeree companies – the rules clarify that it is a matter for the shareholders to decide whether extra remuneration is to be paid for the work a takeover bid involves.
The Board's press release as well as the full text of the proposed revised Takeover Rules are enclosed (clean version and compared with the 2018 version).
Press release takeover 2020-12-01
Takeover rules 2020
Takeover rules 2020 compared with the 2018 version
Takeover rules for certain trading platforms 2020
Takeover rules for certain trading platforms 2020 compared with the 2018 version